Morgan Stanley maintains its ‘Underweight’ rating on Hero MotoCorp with a target price of ₹4,110, noting that sustained market share gains in the EV segment are critical for re-rating. The company’s launch of the Vida V2 electric scooter across multiple segments marks an important step in its transition to electric mobility.
While electric two-wheelers comprised 6% of total market volumes in November 2024, Hero’s competitive pricing for Vida variants could help it gain market share. However, Morgan Stanley remains cautious about long-term challenges, including aggressive competition and regulatory hurdles in the EV space.
Recent Developments: Hero MotoCorp recently announced partnerships with battery manufacturers to strengthen its EV supply chain. Additionally, its Q2 FY25 earnings showed a rebound in rural demand, offering a positive outlook for its core two-wheeler business.
